Galm v. Eaton Corporation - Northern District of Iowa

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II. LEGAL ANALYSIS A. Review Of Benefits Determinations Under ERISA The Eighth Circuit Court of Appeals has summarized the standard ordinarily applicable to a court’s review of a fiduciary’s benefits determination under ERISA as follows: “ERISA provides a plan beneficiary with the right to judicial review of a benefits determination.” Woo v. Deluxe Corp., 144 F.3d 1157, 1160 (8th Cir. 1998); see 29 U.S.C. § 1132(a). It is undisputed that the Toro Plan gives the administrator discretionary authority to determine eligibility for benefits, so we would ordinarily review the administrator’s decision for abuse of discretion. See Woo, 144 F.3d at 1160. “This deferential standard reflects our general hesitancy to interfere with the administration of a benefits plan.” Layes v. Mead Corp., 132 F.3d 1246, 1250 (8th Cir. 1998). Under such standard, a reviewing court should consider only the evidence before the plan administrator when the claim was denied. Id. at 1251. Heaser v. Toro Co., 247 F.3d 826, 833 (8th Cir. 2001). The parties here agree that, as in Heaser, the Plan gives Eaton discretionary authority to determine eligibility for benefits, so that the court would ordinarily review Eaton’s decision finding Galm ineligible for second-tier long term disability benefits under the Plan for abuse of discretion. Id. The court therefore begins its legal analysis with consideration of the deferential “abuse of discretion” standard of review “ordinarily” applicable to a plan administrator’s discretionary denial of benefits. See Heaser, 247 F.3d at 833. 16
1. Deferential review Under the deferential “abuse of discretion” standard of review, “an administrator’s decision to deny benefits will stand if reasonable.” Farley v. Arkansas Blue Cross & Blue 4 Shield, 147 F.3d 774, 777 (8th Cir. 1998). However, as the Eighth Circuit Court of Appeals has also explained, the nature of the review for “reasonableness” depends upon the basis on which the plan administrator denied the claim for benefits. See Donaho v. FMC Corp., 74 F.3d 894, 898-900 (8th Cir. 1996); see also Farley, 147 F.3d at 777 & n.6 (citing Donaho). a. Review of plan interpretation “When determining whether an administrator’s interpretation of a plan is reasonable, [courts in this circuit] apply a five-factor test.” Farley, 147 F.3d at 777 n.6 (citing Finley v. Special Agents Mut. Benefit Ass’n, Inc., 957 F.2d 617, 621 (8th Cir. 1992)); Donaho, 74 F.3d at 899 n.9 (same, also citing Finley). That five-factor test, as explained in Finley v. Special Agents Mutual Benefit Association, Inc., 957 F.2d 617 (8th Cir. 1992), consists of the following: In determining whether the [plan administrator’s] interpretation of [disputed terms] and decision to deny the [claimed] benefits are reasonable, [courts] consider [1] whether [the plan administrator’s] interpretation is consistent with the goals of the Plan, [2] whether [the plan administrator’s] interpretation renders any language in the Plan meaningless or internally inconsistent, [3] whether [the plan administrator’s] interpretation conflicts with the substantive or procedural requirements of the ERISA statute, [4] whether [the plan 4 The Eighth Circuit Court of Appeals has explained that “abuse of discretion,” “arbitrary and capricious,” and “reasonableness” are synonymous in the context of review of denial of claims under ERISA. See Donaho v. FMC Corp., 74 F.3d 894, 898-900 (8th Cir. 1996). 17
Page 1 and 2: To Be Published: IN THE UNITED STAT
Page 3 and 4: 978, 984-986 (S.D. Iowa 2005), both
Page 5 and 6: in his decision: Record at 00026. T
Page 7 and 8: certified in physical medicine and
Page 9 and 10: year did not indicate any ongoing p
Page 11 and 12: the absence of significant sensory
Page 13 and 14: Record at 001359. intention to rece
Page 15: Record at 000197. Galm is not emplo
Page 19 and 20: c. The deferential review applicabl
Page 21 and 22: plan administrator, “something ak
Page 23 and 24: U.S. 1136 (2000)). This is particul
Page 25 and 26: determinations under the Plan. Reco
Page 27 and 28: Record at 001628. With all of the a
Page 29 and 30: Record at 001359. to the effects of
Page 31: IT IS SO ORDERED. DATED this 3rd da

Galm v. Eaton Corporation - Northern District of Iowa

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